Abatement Rate

• Services provided or to be provided to any person, by a tour operator in relation to a package tour is required to pay service tax on 25% of the value of service provided.  The ‘package tour’ is a tour wherein transportation, accommodation for stay, food, tourist guide, entry to monuments and other similar services in relation to tour are provided by the tour operator as part of the package tour to the person undertaking the tour.   For this purpose the bill should indicate that it is inclusive of charges for such a tour;
• Services provided or to be provided to any person, by a tour operator in relation to a tour, if the tour operator is providing services solely or arranging or booking accommodation for any person in relation to a tour is required to pay service tax on 10% of the value of service provided. 

The conditions stipulated for this purpose are as follows:

• The invoice, bill or challan issued should indicates that it is towards charges for such accommodation; and
• This exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation.

• Services other than services specified above provided or to be provided to any person by a tour operator in relation to a tour is required to pay service tax on 40% of the value of service provided.  The bill issued for this purpose should indicate that the amount charged in the bill is the gross amount charged for such a tour.

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